In this article, I will walk you through all you need to know about Solar-Powered Bitcoin mining.
A Bitcoin miner that relies on renewable energy sources is not only economical in the long run but has a very low carbon footprint. Cryptocurrency mining is an energy-intensive process. Hence, relying on fossil fuels to power Bitcoin mining machines not only increases electricity costs but also contributes to global warming.
While natural gas is a much greener energy source, it is not only limited but also requires costly infrastructure to extract and distribute. The wind turbine is another alternative, but there are far fewer sites with powerful winds compared to those sites with adequate sunlight. This leaves our solar system as the most ideal power source for crypto miners.
Key Elements of the Solar Power System for Mining Bitcoin
In this section, we’ll at how the entire solar power system is designed right from the layout of panels, to the supply of electricity to the solar-powered Bitcoin mining operation matters.
The following are the key elements of the solar power system for mining Bitcoin:
1. Solar energy intensity
The amount of solar power that your solar panels will be able to absorb depends on solar energy intensity within the installation locality.
Solar energy intensity refers to the rate concentration of solar power per square meter.
Solar energy intensity reaching the earth’s surface is estimated to be 1,360 watts per square meter. However, the intensity varies from one geolocation to another.
The following factors determine the solar energy intensity in a given locality:
(a) Weather conditions
The following major weather conditions affect the solar energy intensity:
- Cloud density – dense clouds obstruct sun rays. Thus, the lower the cloud density the higher the solar energy intensity.
- Humidity – water reduces the intensity of sun rays. Thus, the lower the humidity the higher the solar energy intensity.
- Dust particles – dust particles in the air tend to deflect sunrays away from reaching the solar panels. Thus, less solar energy reaches the solar panels.
(b) The angle of radiation
Solar energy is more intense when the sun’s rays are perpendicular to the earth’s surface.
(c) Peak sun hours
Peak sun hours for solar-powered crypto mining climaxes around noon time. Given ideal weather conditions, the more the time shifts away from noon, the lower the intensity gets. Thus, the amount of sunlight that can be harnessed is higher during the peak sun hours.
2. Solar array
The arrangement of panels in your solar panel system matters. During the solar panel installation, the solar array should be organized depending on the East-West direction of the sun. To maximize harnessing, the panels are tilted at a certain angle facing the sun. This angle depends on the terrain, peak sun hours, and the direction of the earth’s movement relative to the sun.
The number of solar panels in each array in the solar farm determines the amount of solar that will be captured.
3. Solar technology
The amount of sunlight converted into electricity depends on the solar technology used. Different types of solar panels are built using different technologies and materials.
In addition, the amount that is actually converted from the form captured by the solar panels (direct current) to the form that can used by the mining rig (alternating current) varies from one converter to another.
A few converters achieve a 90%+ conversion rate while many have a much lower conversion rate.
Each type of solar panel has a unique solar technology behind it.
This technology has an impact on the amount of energy from the sun that can be captured and the amount of power that can be output.
Furthermore, solar batteries are built using different types of technologies, which determine the recharge speed, storage capacity, discharge rate, and retention duration.
These determine how much energy a given battery storage can give and for how long it can continue giving.
Powering your Bitcoin mining rig
How many watts of power would you require to power your single mining rig?
This depends on the energy consumption of your particular mining rig. Generally, a standard mining rig consumes an average of 500 watts. It can be slightly less or slightly more. You can check to confirm your Bitcoin mining rig’s power rating.
Think about solar energy intensity
Since solar energy intensity varies from one location to another, let’s take the example of a normal sunny place in California, United States. On a typical sunny day, one can get an average of 5.5 kWh/m2/day. That means 5500 watts per square meter of solar panels per day.
Assuming 10 peak sun hours per day (10 phrs/day), that will mean approximately 550W/m2/phr. (that is, 5500W / 10 hours).
Think about your mining rig
For a standard mining rig of 500W, you would require 1 square meter of solar panels to run your mining rig during peak sun hours.
However, you still have 14 hours outside these peak sun hours that you need to power your mining rig. You will have to power these 14 hours from battery storage.
Thus, you have to dedicate 7,700W to charge your solar battery. (That is 550W x 14 = 7,700W). Assuming 80% power conversion and storage efficiency, you will need 20% more power for purposes of storage (that is, 7700W x 20% = 1540W).
This will bring the total energy to 9,240 Watts of battery charging. In terms of square meters of solar panels, that will translate to 1.68 square meters of solar panels for charging the battery (that is, 9240W / 5500W).
Think about your 24/7 mining operation
Thus, to run your single solar-powered mining rig for 24 hours, you will need a total capacity of 2.68 square meters of solar panels (that is, 1 square meter for direct power, plus 1.68 square meters for stored power).
Factors determining the profitability of your mining operations
An efficient solar power system will minimize losses during the harnessing, conversion, storage, and transmission phases. When losses are minimized, costs get lower while productivity goes higher. Ultimately, this has a significant positive impact on the profitability of your mining operations.
The following are the key factors that determine the profitability of your solar power crypto-mining operation:
1. Efficiency of the mining hardware
Electricity costs are high, regardless of whether you are tapping from the grid or off-grid. Thus, your solar-powered mining rig should be energy-efficient. An inefficient mining rig consumes a lot of power since a lot of energy goes to waste.
You can gauge the efficiency of the mining hardware for your solar project by determining the hash rate produced per one watt of energy consumption.
2. Efficiency of the solar panel system
To make your solar panel system highly efficient in your solar crypto mining process, you need to have efficiency at the following levels:
- Efficiency of the solar panels
- Efficiency of the solar energy converter
- Efficiency of the storage battery
- Efficiency of the transmission
An inefficient solar panel system will have less power output per square meter. Thus, you may require more space and panels to produce enough electricity.
3. Size of the mining operation
Economies of scale can be achieved with a larger solar-powered bitcoin mining operation compared to a smaller mining operation. Due to economies of scale, the average cost per watt goes down. For example, the average cost per watt of a larger solar panel is relatively lower than the average cost per watt of a smaller solar panel. This means that you can achieve higher profitability with a bigger solar panel compared to a smaller solar panel.
When it comes to converters, the price of the converter per kilowatt converted goes down as the capacity goes up. This means that you can achieve higher profitability with a bigger converter than with a smaller converter. The same is the case with battery storage.
However, budgetary constraints aside, economies of scale can be constrained by the available space for your solar project. If the cost of land is high, it may mean the cost of acquiring more land for your solar farm can offset the benefits of the economies of scale since the overall cost of energy production will be much higher. This is why many mining pools and data centers that rely on heavy energy usage are established on solar farms located in semi-arid regions that not only have plenty of high-intensity sunlight but also very cheap land.
4. Mining costs
As a rule of thumb, the lower the mining costs the higher will be the mining profits. The following are the main mining costs to consider:
(a) Installation costs
The installation costs of your solar panel system are an aggregate of the following costs:
- Cost of the solar panels
- Cost of the solar battery
- The cost of the converter and regulator
- Cost of labor
- Cost of land (in the case of a solar farm)
(b) Ongoing costs
The biggest advantage of solar power system is that it has very low ongoing costs compared to other renewable energy sources such as wind turbine. The following are the main ongoing costs:
- Repair and maintenance costs – this includes the cost of repairing or replacing the converter once it is worn out.
- Replacement costs – this is mainly the cost of replacing worn-out battery storage.
- Taxation costs – in one way or another, you will be required to pay tax for your mining operations. The great thing is that solar power tax credits can easily offset or significantly reduce your tax burden. These tax credits are incentives provided by governments to promote the use of solar energy and other renewable energy sources.
It is estimated to cost about $27,000 to mine 1 bitcoin. Given the current average price of about $28,000 per bitcoin, it means that every saving you make on electricity costs will increase your profit margin.
Why solar power is the way to go
Many things make solar power the best way to power your mining rig. The following are some of the most important ones:
The environmental impact of solar crypto mining is negligible compared to mining Bitcoin using alternative energy sources such as fossil fuels, natural gas, and others. This means that solar-powered rigs do not adversely contribute to climate change.
2. Easily accessible
In most parts of the world, especially within the tropics, the power of the sun is abundantly available. All you need is to directly harness it and convert it to electricity.
3. Highly affordable
With solar energy systems, there are no recurrent electricity bills to pay. Once you are done with solar installation costs, you are ready to access free energy from nature. The ongoing costs of electricity supply are extremely minimal, if any.
The solar system has existed for billions of years and will likely continue existing for many more billions of years. Thus, its supply is virtually endless. You can always renew your used-up amount of energy by simply recharging your battery storage.
How would the situation be if our government had the ability to switch on/off the sun? Most of us wouldn’t access it. And even for those who could, it would be extremely expensive. The essence of Bitcoin is to free money from government control. And if you can free the energy that powers your mining operations from the government’s control, then, the intention of Bitcoin is better served.
6. Available off-grid
The key benefit of off-grid availability is that a miner’s operation can be established even in remote areas, provided that a remote internet connection (via satellite) is available. Being off-grid makes it possible to establish a solar farm in a semi-arid location where available space is plenty at a very low cost.
7. Highly scalable
If you want a lot of electricity, you simply increase the number of solar panels, for so long as available space is adequate. You can also keep much electricity by increasing your battery storage capacity. Furthermore, you can easily scale up your solar project to a second site when needed.
So you’ve decided to get into bitcoin mining and you are thinking about buying a container to house your miners. However, finding the best price for a container can be challenging. Prices can vary widely depending on the manufacturer, size, power capacity, and other factors. In this guide, I will walk you through what factors you need to consider before buying a container and I will compare prices between the top manufacturers. Read more.